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India has slashed Iranian oil imports by almost a fifth since December, the sharpest cut among Asian buyers, in a move that should increase its chances of winning a new US waiver next month on sanctions targeting oil trade with Iran.

Sanctions imposed by the US and Europe to force a halt to a controversial nuclear programme that Tehran says is for peaceful purposes saw Iran's oil exports more than halve last year, costing it $5 billion a month in lost revenue.

The sanctions have forced refiners in India, Iran's second-largest oil buyer, to reduce imports because national insurer the General Insurance Corporation of India has said that cover and losses on processing the crude would not be payable by European reinsurers.

Local insurers rely on reinsurers, who are mostly based in Europe and the US, to share the financial burden in case of claims on equipment worth billions of dollars.

The US in June will review the 180-day exceptions granted to Asian importers that make continuous reductions in oil purchases from Iran. Waivers allow Iranian imports without the risk of being cut off from the US financial system.

Refiners want to continue using the Iranian crude many of their plants are configured to process, as changes will need lengthy testing of new grades or cause an alteration in output.

"We are hopeful that India will get a waiver again because of this forced cut in imports," said an Indian government source, who was not authorised to talk to media.

Officials in Iran's top customer China, which cut its oil imports by 3% from the previous waiver period, also expect to have their country's waiver renewed. South Korea has increased its Iranian imports and is sending a delegation to the US to discuss its continued exemption from sanctions.

Waivers on US sanctions have been granted twice to China, India, South Korea and other Asian buyers. Japan, another top buyer, won its third exemption during an earlier review period.

India imported 224,532 bpd from Iran in the December to April period, according to the data and information gathered by Reuters, down from 270,380 bpd it bought in the previous six months. Compared with a year ago, imports fell about 40%. Its imports from Iran in April are expected to be about 123,000 bpd, according to the preliminary loading programme.

Indian insurers have said they will not cover refineries processing Iranian crude because reinsurers in Europe and the US, who dominate the global insurance market, will not honour claims on refineries or other facilities handling Iranian oil.